American Eagle’s Revenue per Square Foot Expected to Trend Up
American Eagle Outfitters (NYSE:AEO) competes with Aeropostale (NYSE:ARO), Gap (NYSE:GPS), Abercrombie & Fitch (NYSE:ANF), and Urban Outfitters (NASDAQ:URBN) in the specialty retail apparel market. We currently have a Trefis price estimate of $26 for American Eagle Outfitters Inc.’s stock.
Trefis members have created forecasts for two key drivers of American Eagle Outfitters Inc.’s (NYSE:AEO) stock over the last week: (1) American Eagle Revenue per Square Foot and (2) Number of American Eagle Stores. The member forecasts suggest that American Eagle Revenue per Square Foot will trend slightly below the Trefis forecast, while Number of American Eagle Stores will be in-line. These projections suggest very small downside to AEO’s stock price.
American Eagle Stores is the most valuable division, constituting close to 50% of the $26 Trefis price estimate for the AEO stock. Hence we believe that American Eagle’s stock is quite sensitive to (1) American Eagle Revenue per Square Foot and (2) Number of American Eagle Stores. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.
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1. American Eagle Revenue per Square Foot
The average of forecasts for American Eagle Revenue per Square Foot created by Trefis members indicated a projected increase from around $430 in 2010 to $527 by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from around $437 in 2010 to $538 by the end of the Trefis forecast period. The member estimates imply a downside of 1% to the Trefis price estimate for American Eagle’s stock. In the past, American Eagle Revenue per Square Foot has increased from $412 in 2004 to around $421 in 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of American Eagle Outfitters Inc.’s stock to American Eagle Revenue per Square Foot.
Our complete analysis for American Eagle Revenue per Square Foot is here.
2. Number of American Eagle Stores
The average of forecasts for Number of American Eagle Stores created by Trefis members indicated a projected increase from around 927 in 2010 to 959 by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 929 in 2010 to 966 by the end of the Trefis forecast period. The member estimates imply small downside to the Trefis price estimate for American Eagle Outfitters Inc.’s stock. In the past, Number of American Eagle Stores has increased from 846 in 2004 to 938 in 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of American Eagle Outfitters’ stock to Number of American Eagle Stores.
Our complete analysis for American Eagle Outfitters’ stock is here.